On Some Fundamental Issues in 21st Century Political Economy
Chapter 8: Karl Marx on Exchange Value and Money
INTRODUCTORY COMMENTS We saw above in Part II that for Smith, largely following Aristotle, the exchange of products will necessarily generate money. Again, following Aristotle, money may be used to acquire more money. Smith considered this to be perfectly natural and basically good; it largely formed the basis of what he termed commercial society, which was the society Smith lived in. Here Smith parted company from Aristotle. Aristotle felt the use of money to acquire more money, which he termed chrematistics, was unnatural. It was a corrupt use of money and would tend to wreck the character of people who used money in this way.1 Marx admired Smith greatly, knew Smith’s work extremely well,2 and no doubt considered Smith to be a worthy adversary. The subtitle to Marx’s Capital was A Critique of Political Economy. Capital was a massive development of his earlier 1859 Contribution to the Critique of Political Economy. Marx considered Smith to be perhaps political economy’s chief, most able spokesperson.3 Thus: Political economy had achieved a certain comprehensiveness with Adam Smith; to a certain extent he had covered the whole of its territory . . . Smith himself moves with great naivete in a perpetual contradiction. On the one hand he traces the intrinsic connection existing between economic categories or the obscure structure of the bourgeois economic system. On the other, he simultaneously sets forth the connection as it appears in the phenomena of competition and thus as it presents itself to the unscientific observer, just as to him...
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